Boeing raises dividend 20% and authorises $18bn share buyback program

By Pouyan Broukhim

US aerospace giant Boeing has made a double announcement that will see the company both raising its quarterly dividend 20% to $1.71 per share, as well as replacing its existing share repurchase program with a larger $18bn buyback.

The announcements come at the end of a strong year for Boeing, having seen its shares surge 84% this year to become the best performing company on the Dow component for 2017.

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“Boeing's strong and growing cash flow allows us to deepen our commitment to provide competitive returns to our shareholders, while continuing to invest in our people, innovation and growth,” said Boeing Chairman, President and Chief Executive Officer Dennis Muilenburg.

“To support our balanced cash deployment strategy, our team remains focused on improving operating performance as we deliver on our substantial order backlog and work to capture a larger share of the growing aerospace market.”

The latest raise that will be implemented commencing 9 February 2018 marks a 250% increase to Boeing’s share dividend over the past five years.

Further, the new buyback authorisation see’s a $4bn increase upon the company’s existing $14bn program, $9.2bn shares of which have already been repurchased this year.

"Our cash deployment plans are the product of our disciplined cash management efforts and reflect ongoing confidence in our financial strength and the long-term outlook of our business," said Greg Smith, Boeing’s Chief Financial Officer and Executive Vice President of Enterprise Performance & Strategy.

The new share repurchase authorisation is expected to commence over the next 24 to 30 months.

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